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Toyota president Akio Toyoda confers with his driving mentor, Hiromu Naruse, at the Nürburgring in Germany. Photo by HANS GREIMEL

Akio Toyoda: Toyota's top car guy has a lifelong driving passion

May 31, 2010

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As Akio Toyoda climbed the ranks at the automaker his grandfather had founded, many Toyota Motor Corp. managers treated the scion with kid gloves.

Not Hiromu Naruse.

Naruse, a certified Master Test Driver who commands cultlike reverence within the company, sneered at the young executive's claim to be a true car guy.

"He told me, 'I don't want to hear what you have to say about cars until you really know how to drive one,' " Toyoda, who became the automaker's president last June, recalled in an interview on the sidelines of this month's Nurburgring 24-hour endurance race.

So Toyoda embarked on a quest to become one of the company's top certified test drivers and its top car critic. That challenge and journey combined to forge Toyoda's management priorities, ones that now are reshaping Toyota in a time of crisis.

Global recalls have led to criticism that Toyota has grown deaf to its customers. Toyoda's personal response to the crisis reflects his emerging management style and draws on his car-guy roots:

-- He demands that executives spend more time focused on product.

-- He pushes for a more hands-on approach throughout the company.

-- He is ordering engineers and designers to spice up the brand's bland image.

'Go and see'

By getting behind the wheel and scrutinizing product, the 54-year-old Toyoda believes he is living out the company's guiding principle: "Genchi, Genbutsu"--Japanese for "go and see for yourself."

The key is getting out of the laboratory, Toyoda said.

"Lately, there are a lot of left-brain thinkers at Toyota," he said. "People who like to just logically come to conclusions in a meeting room. We may have had a little too much of that."

Toyoda peppers nearly every public address with talk of "seasoning" the company's vehicles so they're less blah and more "fun to drive." He cites a hybrid sports concept unveiled in January, a low-slung convertible based on the MR2, as the kind of product to expect under his tenure.

"I wanted a car that shows what we are aiming for, something affordable, fun to drive and good for the environment," Toyoda said.

Toyoda's business decisions are often rooted in such instincts. This month's snap decision to team with electric car maker Tesla Motors Inc., for instance, came after he test drove its Roadster in the hills of California and deemed it a hot ride.

But most of his first year in office left little time to pursue such visions.

Toyota posted its first loss in seven decades. An unprecedented quality meltdown triggered the recall of more than 8.5 million vehicles worldwide. The problem, Toyoda said, was that the company grew too fast and took its eye off the product.

"Growth in itself is not bad if you can cultivate the human resources to keep up," Toyoda said. "But I don't want to be the largest company in the world. I want to be the best."

Toyoda's love of cars dates to a childhood surrounded by them. In kindergarten, he drew pictures of himself as a race car driver. Under Naruse, he learned a true appreciation for cars.

Naruse first tried to discourage Toyoda, warning of the inherent dangers in extreme driving. But that only egged him on.

"I love driving," Toyoda said. "So when a strict teacher like Naruse is telling me such stuff, it was hardly discouraging. It was more of a turn-on."

Every week for several years, Toyoda practiced high-speed braking, emergency rollover procedures, pursuit driving and controlled spins until he earned his "advanced" certification.

Toyoda believes it all makes him a better CEO--one who, as Naruse exhorted, understands cars and their boundaries.

Toyoda said: "When it comes to our products, being able to know what is good and what is bad is a special skill."

Some observers disagree. Toyoda's incessant test driving and enthusiasm for racing are often derided in the Japanese press as a distracting hobby. Masaaki Sato, a noted Japanese auto industry watcher who has written such books as The House of Toyota and The Toyota Leaders, describes Toyoda as "the emperor with no clothes" who dodges the details while leaving daily business to his top lieutenants.

Last month, Japan's Foresight magazine suggested that a disaffected cohort at the company wants Toyoda to step down. Although no strong candidate exists to replace Akio Toyoda, Foresight pointed to Tetsuro Toyoda, president of Toyota Industries Corp., a machinery affiliate. Testuro is the son of Eiji Toyoda, a former Toyota Motor president.

Akio Toyoda is aware of his detractors. He said becoming an expert driver was partly an effort to win credibility at the engineering-driven company.

"I'm not an engineer," said Toyoda, who joined the company in 1984 after working at an investment bank and consulting firm.

'A common language'

He was looking for "a common language with our engineers. And driving is a tool that can serve as that common language."

His management style has always been about delegating authority to people closest to the action, he says. Underlings describe Toyoda as a big thinker, not a micromanager.

In Japan, his rigid press conference performances usually consist of canned statements. But at Nurburgring, an all-smiles Toyoda showed disarming humility and spontaneity.

A relaxed Toyoda roamed the pits making small talk. During the race, fellow driver Ulrich Bez, CEO of Aston Martin, introduced VIPs to his good friend Akio.

At the post-race party to celebrate the Lexus LFA's 18th-place finish in a field of nearly 200 cars, Toyoda led the beer-and-champagne battle that soaked everyone.

But his charismatic performance likely will remain the hidden alter ego of a low-profile, product-focused car guy. "I've been called media-shy, and that's not going to change," Toyoda said. "Here's why: The main actor is the vehicle."